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The Honolulu Advertiser
Posted on: Wednesday, October 29, 2003

Medically uninsured on rise in Hawai'i

By Robbie Dingeman
Advertiser Health Writer

Cody Keale works part time at a Waikiki restaurant while he goes to college. He has been dogged by fatigue lately, falling asleep in class and even behind the wheel. He'd like to go to the doctor but doesn't have health insurance.

So the 23-year-old Kapi'olani Community College student waits and worries.

Keale, who lives in Palolo, has worked at Duke's Canoe Club as a host for the past two years, but he has had health insurance for only about four months of that time. He usually doesn't work enough hours to hit the threshold where the law requires employers to cover their workers.

"Right now, I'm always tired," Keale said. "I want to go get it checked out but I can't right now because I have no health insurance. I can barely make it paying the rent."

Who lacks health insurance in Hawai'i?

• An estimated 1 in 10 people in Hawai'i — 120,000 in all — do not have health insurance.

• About half of the uninsured have jobs, but lack health coverage because they work part time, are self-employed, consultants, temporary government hires or in other job categories that don't qualify for the mandatory coverage by employers under the Hawai'i Prepaid Health Care Act.

• About 21 percent are adults who are eligible for healthcare coverage under government programs such as Medicaid. But language or cultural barriers or complex paperwork discourage some from seeking benefits.

• About 22 percent are children and teens who lack health coverage despite the July 2000 expansion of Medicaid's QUEST and fee-for-service programs.

• Breakdown of uninsured on the Islands:

  • Kaua'i, 9 percent
  • Maui County, 8 percent
  • Big Island, 7.4 percent
  • O'ahu, 4.5 percent

Source: The Hawai'i Uninsured Project based on U.S. Census Bureau

Keale is among a growing number of Hawai'i residents who do not have health insurance. Once the nation's pioneer in employer-provided medical plans, with the highest proportion of its residents with health coverage, Hawai'i has seen its rate of uninsured people double in the past two decades, from 5 percent of the population in the 1980s to 10 percent in 2001 (still good enough to be ranked No. 8 nationally).

One of the main causes, experts say, is a changing Hawai'i employment picture that relies increasingly on part-time workers as a key strategy to cut costs — costs such as employee health insurance.

"We seem to have more part-time workers than the rest of the U.S.," said Gerard Russo, a University of Hawai'i associate professor who specializes in health economics.

From 1990 to 2000, the number of part-time workers in Hawai'i grew from 79,000 to 114,000, an increase of 44 percent, according to the state Department of Labor and Industrial Relations. Meanwhile, the number of full-time workers in that period increased 2.5 percent, from 445,000 to 456,000.

Michael Ingraham, safety manager at Duke's, said the company hires a mix of part-time and full-time employees. Covering a daily schedule that runs from 7 a.m. to 12:30 a.m. requires some flexibility and 320 employees, he said.

"We schedule them because we need them for the hours," Ingraham said. "We don't not schedule them to make sure they don't get insurance."

In Hawai'i, health insurance is a given for full-time workers and their families because of the Prepaid Health Care Act of 1974, the only state law of its kind in the nation. It requires employers to provide health insurance coverage and pay the bulk of the premiums for employees who work more than 20 hours a week. The employee share is capped at 1.5 percent of their salary.

According to the Medical Expenditure Panel Survey, which tracks healthcare use across the country, Hawai'i employers pay the highest percentage of health insurance premium costs in the nation. The survey said that in 2000, the average Hawai'i healthcare premium was $184 a month, with employees paying $16 of that.

In comparison, the average national premium was $221 a month, with employees paying an average of $37 of that.

While the Prepaid Health Care Act won praise for its pioneering protection, Russo said it appears some businesses keep some employees below the 20 hours a week that would trigger employer-paid health insurance. "We seem to have more part-time workers as a result of that," he said.

Paul Tom, president of Benefits Plan Consultants Hawai'i Inc., a health insurance plan consultant, said the part-time trend was also fueled by the state's transition from an agricultural to a service industry-based economy, which meant more seasonal jobs in hotels and restaurants.

"They manage their hours of the employees to keep their costs down," Tom said.

Healthcare conference

• "Coverage for All: Charting a Course for Health Coverage Expansion," a conference on healthcare availability sponsored by the Hawai'i Uninsured Project.

• 7:30 a.m. to 3 p.m. today

• Hilton Hawaiian Village

• For information, visit www.healthcoveragehawaii.org

Kaiser Permanente spokesman Chris Pablo said factors such as the state's relatively low wages also have played a part in driving up the number of part-time workers. He pointed to a friend who works during the day for the state and as a security guard at night. "It's of necessity as well as of convenience," Pablo said.

Another reason cited for the increase in uninsured people in Hawai'i is a rise in the number of self-employed people. The UH Social Science Research Institute estimates that 11,800 Hawai'i workers fall into this category of self-employed or sole proprietor.

Professional surfer Jason Bogle of Kailua is one of those self-employed people who are uninsured.

Bogle, 25, remembers thinking: "Why should I throw away $150 a month when I never go to a hospital?"

Then he was diagnosed with Ewing's sarcoma, a rare bone cancer. In May he moved to California, where his mother lives and where the state's Medi-Cal program covers some of his bills for treatment, including chemotherapy. Everything else must be paid for by private donations and by his family.

Jeremy Alberga of AcademyHealth, an organization in Washington, D.C., that advocates for health policy reform, said Hawai'i remains ahead of most states through a commitment to helping people find insurance. But he said there may be a shift away from employer-based insurance because more people work as consultants or independent contractors. The old plantation economy or the 30-years-at-one-company models are gone.

The issue of the growing number of uninsured affects everyone, Kaiser's Pablo said. People who are uninsured tend to delay treatment until they are seriously ill or injured, which ultimately drives up healthcare costs overall.

"It's a waste of resources to treat someone in the emergency room because they can't afford to go see a doctor," Pablo said.

The state Department of Health and other organizations formed the Hawai'i Uninsured Project to research the problem and brainstorm possible solutions. It is presenting findings at a daylong conference today at the Hilton Hawaiian Village.

"We'll never cover everyone but we're going to ensure that there are more options," said project associate director Jacquelyn Smith. "It's all going to boil down to making tough choices in tough times."

Project associate director Gwen Ouye-Nakama said the group is exploring all options that could help more people get health insurance, including refundable tax credits.

Another possibility is a private-plan option that people could enroll in, instead of depending on employers. To make it affordable, yet receiving enough in premiums to make it financially viable, Ouye-Nakama said it could use a sliding scale in which people with lower incomes could be subsidized, while those earning more would pay premiums but receive tax credits.

While the Legislature has debated the pros and cons of adjusting the state-mandated Prepaid Health Care Act, perhaps to ease the burden on businesses, changing it would require congressional approval because the state asked for and received an exemption from the federal law governing private health and pension benefits, Ouye-Nakama said.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 535-2429.

Correction: Jacquelyn Smith is associate director of community relations and grant management for the Hawai'i Uninsured Project. A different title was given in a story on a previous version of this story.